President Obama dodges Pacific Trade Deal threat to the environment

Submitted by Cam Walker on Fri, 22/01/2016 - 09:52

By Bill Waren, senior trade analyst, Friends of the Earth US

Friends of the Earth is disappointed but not surprised with what President Obama had to say in his State of the Union address about the environmentally-destructive Trans Pacific Partnership trade agreement.[1] Nor were we astonished that the reaction of most Members of Congress was unenthusiastic.

What is most remarkable is that President Obama devoted less than 30 seconds of his hour long speech to the TPP, his most significant legislative proposal in 2016. Without doubt, he sees the TPP as a legacy defining achievement in the course of his eight years in office.[2] But rather than making a reasoned argument in support of the TPP, he quickly changed the subject.[3]

Barack Obama is a learned legal scholar. So why was he playing hide the ball with the TPP, like a lawyer withholding evidence at trial for fear of losing? The likely answer is that the White House is attempting to draw as little public attention as possible while trying to push the unpopular TPP through Congress.

Activists at the No TPP rally in Gaithersburg, MD, 2015. Photo credit: Popular Resistance

President Obama knows that the TPP is unpopular with the American people[4] and it faces an uncertain fate in Congress.[5] Environmentalists in the United States are almost unanimous in opposing the TPP[6] as are most Democrats and many Republicans in Congress[7] — thus the almost total lack of applause by Members of Congress in response to the President’s call for congressional approval of the TPP.

The most resolute congressional opponents of the TPP are an overwhelming majority of Democrats in the House of Representatives. And no wonder. The TPP is not so much about trade as it is about deregulation and forcing governments to pay corporations and wealthy investors for the cost of complying with environmental and other public interest safeguards. The TPP contains all the worst elements of NAFTA plus new provisions that give more goodies to global corporations that care little about protecting working families or the planet.

The TPP contains no across-the-board exceptions to ensure that environmental and climate laws, regulations and enforcement actions are not undermined. Instead, the TPP broadly restricts the policy space for governments to take effective environmental and climate action.

The TPP threatens a wide range of sensible environmental policies

TPP and conservation.[8] Obama claimed the TPP will be good for the environment, but the overwhelming majority of environmental organizations are resolutely opposed to it. The TPP’s so-called environment chapter, which is the basis for the President’s claim, is more window dressing than substance. Despite some broad and legally meaningless aspirational rhetoric in its text, the TPP environment chapter deals narrowly with a few conservation issues and will not be enforced. Meanwhile, the TPP as a whole is a frontal assault on the environment and sound climate policy in particular.[9]

TPP and climate.[10] Clearly, the TPP would ramp up global warming. The Republican congressional leaders are hell-bent on using the TPP to increase U.S. coal, oil and gas exports to the world that are fueling global warming.[11] The TPP is designed to protect “free trade” in dirty energy products such as tar sands oil, coal from the Powder River Basin[12], and liquefied natural gas shipped out of West Coast ports. As just one example, the TPP requires the U.S. Department of Energy to approve all exports of liquefied natural gas to TPP countries.[13] The result would be more climate change from carbon emissions across the Pacific.

Brent Blackwelder outside the USTR for the No TPP rally in Washington, D.C., 2014.

International trade law would trump international climate law because the TPP, like other global trade and investment agreements, can be effectively enforced by international tribunals with authority to levy retaliatory trade sanctions or unlimited awards of money damages whereas multilateral environmental and climate agreements are mere moral obligations. To make matters worse, the Customs Bill, which is part of the Trade Promotion Authority or “Fast Track” package of bills to ease to passage of the TPP through Congress, explicitly bars the U.S. Trade Representative from taking positive action to address climate change in trade agreements.[14]

TPP and chemicals regulation.[15] Deregulation of chemical safety standards, as a result of the TPP, threatens public health.[16] TPP provisions related to regulation of chemicals will strongly encourage the downward harmonization of toxic chemicals regulation in U.S. states toward the low common denominator — namely, the U.S. federal government’s Toxic Substances Control Act. TSCA has been characterized by the President’s Cancer Panel as perhaps “the most egregious example of ineffective regulation of chemical contaminates.”[17] TPP could stymie congressional action to more effectively regulate chemicals associated with breast cancer, autism and infertility.

Similarly, chemical companies like Syngenta and Bayer want to use TPP to stop future actions that would eliminate bee-killing pesticides.[18] The TPP could thwart U.S. and global efforts to stop the use of bee-killing neonicotinoid (neonic) pesticides. Neonics are a leading cause of bee declines and bees are essential pollinators for our agricultural crops and garden plants.[19]

The effects on other forms of wildlife could be similarly profound. For example, synthetic chemicals are causing hormone disruption in animals as diverse as alligators, polar bears and some species of fish, impacting their ability to reproduce. PFOS (Perfluorooctanesulfonic acid) used in stain repellants is a cancer-causing chemical that has been found in European dolphins, tuna and birds like the common cormorant.[20]

TPP and the food system.[21] Food Safety safeguards are also put at risk by new TPP provisions that are even more dangerous than the World Trade Organization standards.[22] Specifically, the TPP would give food exporters greater powers to challenge border inspections[23], as well as attack food safety standards and to substitute private food safety certifications for government inspections. TPP also promises to unleash a tsunami of unsafe seafood exports to the United States. Vietnam and several other Pacific basin countries are notorious for their unclean and toxic factory fish farming operations.[24]

Furthermore, the TPP provides new protections for biotechnology and use of genetically modified organisms.[25] Obligations are established for TPP countries to quickly approve GMO crops and products, unless very high standards of scientific certainty are met. GMO labeling requirements at the state level are put at risk. In addition to that, significant patent protections are provided to biotech seed companies.[26]

More generally, the economic and environmental sustainability of the whole food production system is put at risk by the TPP. The TPP is likely to increase the volatility of agricultural markets, putting sustainable family farms at risk and increasing corporate control of markets and production practices.[27] It can be further expected that many family farmers will be reduced to working as contractors for global pork and poultry giants who own the animals while the farmer absorbs the production costs and risks. As such, with the TPP, family farmers will suffer; global agribusiness giants will prosper; and the rural environment will be despoiled.[28]

TPP and product labeling.[29] TPP provisions related to product labeling will undercut consumers right to know what is in their food and the whether the food is produced in a humane manner protective of animal welfare. These provisions are more restrictive than tough World Trade Organization standards. For example, the WTO Appellate Body found that the U.S. dolphin safe labeling program violates the WTO agreements.[30]

TPP and services.[31] TPP services provisions focus on lowering regulatory “barriers” to international trade in a range of environmentally sensitive services sectors. Also, public services of an environmentally-sensitive nature are in danger of being privatized. The coverage in the TPP services chapter is far broader than the WTO Services agreement.[32] This Includes transportation, water, sanitation, electricity, other energy services, ports, pipelines and public utilities generally. Mining, oil drilling, and infrastructure construction services are all covered. Coverage of water policy is particularly vexing, given that water is essential to human, animal and plant life — it’s not simply another commodity to be traded in the global marketplace.[33]

The list of TPP threats to the planet goes on.

The TPP has powerful enforcement mechanisms

The TPP can be effectively enforced by international investment tribunals authorized to award money damages in the millions or billions of dollars, and by international trade tribunals that may authorize retaliatory trade sanctions like higher tariffs. Furthermore, these enforcement mechanisms are “cross-fertilized” with regulatory review provisions[34] which have nothing to do with trade and everything to do with setting up institutions and procedures to effect deregulation of environmental and other public interest safeguards.[35]

Bill Waren during the No TPP rally in Washington, D.C., 2015.

TPP and investment tribunals. The TPP like NAFTA provides authorization for private investors and corporations to sue nation states for money damages in compensation for complying with environmental and public interest regulations.[36] These provisions have been used in existing agreements to roll back environmental regulations around the world.[37] And, given that the Japanese and other Pacific countries invest heavily in the U.S., we should expect suits against U.S. environmental measures if the TPP is approved. This would discourage government action like restricting oil and gas drilling, imposing pollution controls, and limiting the use of fracking (hydraulic fracturing). This is not speculation. TransCanada has sued the U.S. under the NAFTA investment chapter for $15 billion for stopping construction of the Keystone XL pipeline.[38]

TPP and trade tribunals.[39] In addition to unlimited money damages for violation of the TPP investment chapter, most of the other substantive TPP chapters can be effectively enforced through retaliatory trade sanctions authorized by trade tribunals in government-to-government dispute resolution. Such sanctions can include higher tariffs on goods and services or even loss of intellectual property rights for firms from the offending country. Such sanctions are generally, if not always, effective in forcing countries to come into compliance, as witnessed by the recent repeal by the U.S. Congress of a U.S. country of origin meat labeling law, as a result of an unfavorable WTO tribunal ruling.[40]

A Constitution for the Asia-Pacific economy

Because it can be effectively enforced with biting sanctions imposed by international investment and trade tribunals, the TPP like other post-1994 trade and investment agreements is intended to perform a function that is fundamentally constitutional in nature: it limits the powers of government in environmental and other policy areas. The premise is that regulation by democratic institutions inhibits global economic growth. We don’t need such an undemocratic constitution for the Asia Pacific economy of the kind contemplated by the TPP. And, we have a good chance to derail it. Public opinion can force Congress to reject the TPP.

Footnotes:

[2] Ian Bremmer Pacific Trade Deal Is Good for the U.S. and Obama’s Legacy, TIME, October 5, 2015, available here; Shom Sen, What the Pacific trade deal means for Obama’s legacy, Fortune, October 5, 2015, available here; Peter Baker, The Trans-Pacific Partnership and a President’s Legacy, New York Times, June 14, 2015, available here; Annika Fredrikson, How the Trans-Pacific Partnership could define President Obama’s legacy, Cheistian Science Monitor, October 5, 2015, available here.

[3] According to Lori Wallach, Director of Global Trade Watch, “Prior to the speech, the TPP was described as one of the major focal points of the State of the Union. When the president listed his top priorities at the beginning of the speech, the TPP was not included. Why did it shrink to almost nothing? Is the TPP still the president’s top legislative priority for 2016 or does the short shrift indicate he may realize he does not have the votes? Or, is the short shrift just more of the same strategy of keeping a low profile for a very controversial agreement in the hopes of passing it under the radar? If the latter is his goal, the movement’s job is to highlight it and make sure it is on everyone’s radar.” Lori Wallach, Is The TPP Still Obama’s Top Priority?, Public Citizen, January 13th, 2016, available here.

[4] Public Citizen, U.S. Polling Shows Strong Opposition to More of the Same U.S. Trade Deals from Independents, Republicans and Democrats Alike, July 2015, available here. Public Affairs, Americans Concerned about Trans Pacific Partnership Agreement November 20, 2015, available here.

[5] Bill Waren, TPP in trouble: Why we can win this fight, Friends of the Earth, August. 19, 2015, available here.

[9] Sierra Club, TPP Text Analysis: The TPP Would Increase Risks to Our Air, Water, and Climate, November 2015, available here; Center for International Environmental Law, The Trans-Pacific Partnership and the Environment: An Assessment of Commitments and Trade Agreement Enforcement, November 2015, available here.

[10] See generally, TPP chapter 2 national treatment and market access SOTU 2016 Medium text 11, National Treatment and Market Access for Goods, available here; as well as TPP chapter 9 investment, available here.

[11] TPP provisions on market access and trade in goods mirror or implicitly reference the WTO General Agreement on Tariffs and Trade, and could chill future legislative action on fossil fuel exports. Lawyers for fossil fuel exporters argue that GATT article XI:1 on “General Elimination of Quantitative Restrictions” prohibits restrictions on the export of products, including fossil fuels, to another WTO member, other than duties, taxes or other charges.( See Article XI: 1 of the WTO General Agreement on Tariffs and Trade (General elimination of quantitative restrictions), available from the WTO here): The TPP would therefore encourage increased U.S. coal, oil and gas exports to the world that are fueling global warming. In response to campaigns launched by climate activists to impose regulations and controls on U.S. fossil fuel exports, corporate trade lawyers are insisting that government controls on energy exports are illegal under international trade and investment law. This claim, of course, may overlook GATT article XX, which provides an exception to the overall agreement on trade in products “necessary to protect human, animal or plant life or health” and “related to conservation of exhaustible natural resources” (provided that they are linked to domestic resource conservation measures). Article XX is not as strongly worded as a should be, but if there were ever a measure that falls under the exception, it ought to be a climate change measure, such as a control on fossil fuel exports. The very survival of the life on the planet as we know it is at stake. Certainly, such export controls are not disguised protectionist measures. Friends of the Earth, nonetheless, believes that if the TPP incorporates all or part of the GATT Article XI:1 even indirectly, by implication, or by reference, then the article XX “necessity” test might be unnecessarily hard to meet, especially as interpreted by an unsympathetic dispute resolution panel. Alternative regulatory schemes for addressing the climate crisis in less burdensome ways for international trade can always be hypothesized. A necessity test, also, inappropriately reverses the deference that domestic courts give to economic regulations. The “related to conservation” test could also be problematic. In addition, the “chapeau” or introductory clause of Article XX requires that application of a measure, such as a fossil fuel export regulation, must not be a “means of arbitrary or unjustifiable discrimination.” The term “unjustifiable” is vague and subjective.

[16] For example, 216 chemicals are associated with increases in breast cancer, including 73 found in consumer products or food. Among the many chemicals suspected of causing learning and developmental disabilities are organophosphate pesticides, such as melaththion. Everyday solvents such as methanol and trichloroethylene are associated with Parkinson’s disease. Endocrine disruptors, such as BPA, which is found in plastic and the linings of cans and other food packaging, interfere with hormones and may be associated with adverse health impacts including infertility, early puberty and breast cancer, just to name a few. Bill Waren, Friends of the Earth, Fast Track Attack on Chemical Safety and Food Labels, available here.

[28] Karen Hansen-Kuhn, Who’s at the Table? Demanding Answers on Agriculture in the Trans-Pacific Partnership, Institute of Agriculture and Trade Policy, March 4, 2013, available here; Big Meat Swallows the Trans-Pacific Partnership By Ben Lilliston Institute for Agriculture and Trade Policy November 2014, available here; Ben Lilliston and Karen Hansen-Kuhn. “From Dumping to Volatility: The Lessons of Trade Liberalization for Agriculture.” Trade and Environment Review 2013. UN Conference on Trade and Development. 2013. 276. Available here; Karen Hansen-Kuhn. “NAFTA and U.S. Farmers 20 Years Later.” Institute for Agriculture and Trade Policy. November 22, 2013, available here.

[29] Food and Water Watch. The Economic Costs of Food Monopolies. November 2, 2012, available here.

[32] This is because the TPP employs a negative list approach, meaning that the “default position” is that all government measures in all economic sectors are covered under TPP, unless a specific reservation is listed for a specific sector or government measure. By contrast, under a positive list approach, such as that generally used under the WTO services agreement (GATS), specific economic sectors or government measures in most circumstances are voluntarily listed on a national schedule. A positive list approach ought to have been used in TPP with respect to services. Only a positive list of commitments provides reasonable certainty about which green policies are covered and which are not. It also provides far more policy space for the adoption of new measures and amendments to existing environmental policies. Finally, it is just more practical: it is a monumental task to list every measure conceivably subject to inappropriate trade agreement litigation on a negative list.

[33] Problems with the “commoditization of the commons” could arise. The essential nature of water and sanitation for human health and survival, for example, sets this area apart from other sectors. The human right to water and sanitation, recognized by the United Nations General Assembly in July 2010,. means that extra care must be taken before water policy in any form is subject to trade obligations. United Nations, The Human Right to Water and Sanitation, Media Brief, 2010, available here.

[35] TPP regulatory review provisions have nothing to do with trade and everything to do with setting up institutions and procedures to effect deregulation of environmental and other public interest safeguards. TPP negotiators sought to “cross-fertilize” regulatory review with other chapters of the TPP. For example, the TPP investment chapter would allow foreign investors to sue governments in international arbitration for money damages in compensation for the cost of complying with regulations that reduced their investments’ value or future profitability, based on the evidence provided by the regulatory review process. Among other negative consequences, these regulatory review provisions encourage the inappropriate use of business-friendly, cost benefit analysis that would hamstring public interest regulations. The process inherently gives disproportionate weight to quantitative data and economic costs, while diminishing the perceived importance of qualitative benefits such as saving lives, maintaining the equilibrium of the global eco-system, and protecting wild places. Jane Kelsey, Preliminary Analysis of the Draft TPP Regulatory Coherence Chapter, available here; Bill Waren, The TPP trade agreement regulatory coherence chapter is an environmental hazard, Friends of the Earth, June 2012, available here.

[36] The TPP investment chapter follows the same basic model as past U.S. agreements with some tinkering around the edges to favor plaintiff-investors in some subtle ways and to favor defendant nation-states in subtle ways in some areas like tobacco control cases for example. . But, there has been no fundamental reform. See Todd Tucker Memo, November 5, 2015, available here; See generally, Public Citizen, Initial Analyses of Key TPP Chapters, November 2015, pp. 12–15, available here.

[37] See generally, Bill Waren, Tall tales of the TPP (and TTIP), Friends of the Earth Blog, February. 27, 2015, available here; Bill Waren, Sen. Elizabeth Warren: Trade deal must not undercut Wall Street reforms. Friends of the Earth, December 29, 2014, available here; Friends of the Earth, Old Trade Wine in New Bottle, available here; Friends of the Earth, Chevron Fracks Europe, available here; Sarah Anderson et al, The New U.S. Model Bilateral Investment Treaty: A Public Interest Critique, Institute for Policy Studies, May 2012, available here.